Group 1 - The article discusses the regulations regarding the calculation of taxable sales revenue under the Value-Added Tax (VAT) system in China, specifically stating that the sales revenue includes all payments received by the taxpayer except for the output tax [2] - It outlines the various types of additional fees that are considered part of the sales revenue, including handling fees, subsidies, penalties, and interest on delayed payments [2] - The article emphasizes that any additional fees collected from buyers, including late payment interest, should be treated as taxable income and included in the sales revenue for VAT calculation [3][2] Group 2 - The article references the Personal Income Tax Law, indicating that certain types of income, such as welfare payments and relief funds, are exempt from personal income tax [11] - It specifies that welfare payments are defined as living subsidies paid to individuals from funds retained by enterprises or organizations, while relief funds are provided by government departments to assist individuals facing financial difficulties [11] - The article clarifies that not all payments from welfare funds are tax-exempt, particularly those exceeding the stipulated limits or those that do not qualify as temporary living assistance [12]

Core Viewpoint - The upcoming implementation of the "Value-Added Tax Law" on January 1, 2026, will redefine the taxable base for VAT, shifting from "total price and additional fees received" to "all prices related to economic benefits in both monetary and non-monetary forms" [1] Group 1: Tax Base Definition Changes - The new definition of taxable base will impact how VAT is calculated, particularly concerning interest on delayed payments [1][2] - The discussion on whether delayed payment interest should be subject to VAT hinges on the interpretation of tax law rather than the existence of legal grounds for taxation [2][3] Group 2: Legislative Changes in Taxation Basis - The previous VAT regulations included "additional fees" in the taxable base, which could encompass delayed payment interest as a form of additional charge [3] - The new VAT law replaces "additional fees" with "related prices," emphasizing the relationship between the payment and the goods sold, thus requiring a substantive assessment of the connection between delayed payment interest and the sale [4][5] Group 3: Taxation Principles and Interpretations - It is argued that delayed payment interest should not be subject to VAT as it does not constitute part of the sales price agreed upon by the parties involved [6][7] - The principle of tax equity suggests that VAT should be levied based on the buyer's consumption expenditure, and delayed payment interest does not reflect the buyer's economic capacity to pay [8][9] Group 4: Exceptions in Taxation - In cases where taxpayers misuse the legal form of delayed payment interest to evade VAT, tax authorities may impose VAT on such interest as an exception [10]